Question

according to the fasb’s conceptua framework, predictive value is an ingredient of

Answer 1

According to the fasb’s conceptua framework, predictive value is an ingredient of

Ans: Relevance

Explanation:

1) FASB standas for Financial Accounting Standar Board.

2) It's a private a not for profit organization, which developd the conceptual Framwork.

3) Purpose of Framework;

• To assist IRS in its review of existing IFRS's

• Provide guidlinepreparers of financial statements in developing accounting policies for transactions or events not covered by existing standards.

4) As per Framework Qualitative Charatcteristics are:

• Relevance
• Faithful Representation

5) Where relevance,

Relevance requires financial information to be related to an economic decision.

Financial information is useful if it has predictive value.

Predictive value helps users in predicting or anticipating future outcomes.